Cohance Lifesciences (NSE:COHANCE) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the Q2 FY 'twenty seven Earnings Conference Call of Cohance Lifesciences. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity to ask questions after the presentation concludes. Please

0:24 note that this conference is being recorded. Before we begin, I would like to remind you that today's discussion may include forward looking statements that are subject to risks and uncertainties. Actual results may differ materially from those expressed or implied. We encourage you to review the disclosures filed by the company. I now hand the conference over to Ms. Cindrella Carvalho. Thank you, and over to you.

0:51 Thank you, Yash. Good evening, ladies and gentlemen, and thank you for joining the Cohance Lifesciences earnings conference call to discuss our financial results and the second quarter and the first half of FY 'twenty seven. Today, we have with us Uman Gora, Executive Chairman and Group CEO Yan Liu, CEO, Pharma, CDMO Gundan Singh, CEO, API plus Amrit Singh, CEO, Specialty Chemicals and our new member, Abhi Mani Oja, CFO. I will now hand over to Uman for his opening remarks. Thank you, Cinderella. Good evening, and good morning to everyone. Before I move to the speech, I'd like to say that we are deeply saddened by the loss of our colleague following the incident at our Suriyapet facility and our thoughts are with his family and loved ones.

1:45 We take this incident extremely seriously and have initiated the necessary corrective and preventive action. Safety and compliance will remain an absolute priority across all our operations.

2:00 When we spoke at the end of quarter one, we had said that quarter one would represent the low point for the quarter. We expected performance to improve sequentially from quarter two, followed by a return to year on year growth in the second half. Q2 has progressed in line with that trajectory. Revenue increased 13% sequentially to 4,767 million dollars while adjusted EBITDA increased to $458,000,000 with the adjusted EBITDA margin improving to 10%. As we enter half two, our operating visibility is stronger. In small molecules, the order and reload position for quarter three and quarter four has improved.

2:45 We have also secured two new commercial programs and one late stage program with large global pharmaceutical customers, strengthening our relationships with these customers and broadening the medium term opportunity base. In ADCs, we are seeing encouraging signs of development funnel with improving order activity and visibility, particularly towards the second half. The reorganization at NJ Bio is sharpening our commercial focus and bringing our bioconjugation capabilities closer to Cohance's payload linker and manufacturing capabilities in India. Our bioconjugation capacity expansion remains on track for commercial availability by early fiscal year 'twenty eight, further strengthening our end to end ADC offering.

3:35 With the broader funding environment improving, alongside better momentum in the development pipeline and order activity, our focus is on improving utilization and operating performance at NJ Bio with a clear objective of making the business of sorry, moving the business to breakeven. In nucleic acids, Sapala continues to perform strongly. We are increasingly integrating its specialized chemistry and customer relationships with Cohance's development and manufacturing network. This is one of the clearest examples of how the capabilities we have brought together can create a broader proposition for our customers. Our API plus business continues to provide resilience to our portfolio, while in SpecChem, we are progressively repositioning the business towards a broader innovator led portfolio.

4:25 Taken all together, we are beginning to see the different parts of Cohance operate more effectively as one platform.

4:34 Capital allocation and capability building are an important part of our strategy. We also have a broader capital program directed towards growth capabilities as well as quality, safety, sustainability and maintenance. We are planning to supplement the capabilities we already have and build the adjacencies required to unlock the full integration potential of the Cohance platform. This includes strengthening bioconjugation, building a more integrated ADC payload linker capability and enhancing our R and D infrastructure across payload linkers, APIs and specialty chemicals. While we remain disciplined in deploying capital with investments phased against customer visibility, the objective is to address a larger part of our customer value chain, improve program conversion and create a more integrated development to manufacturing proposition.

5:31 On quality and compliance, we have completed U. S. FDA inspections at Parshmiralam, Shamshabad and Jagiapet and submitted our comprehensive responses. We are progressing the required copper actions within the committed time lines with regulatory compliance remaining an absolute priority across all our facilities. At this stage, we are also assessing any further impact from the sodium freight closure order. Based on the visibility we have today, we continue to expect half two of FY 'twenty seven to deliver year on year growth on both revenue and EBITDA. This represents an important transition for us from sequential recovery in quarter two to year on year growth in the second half.

6:18 As I look ahead, I believe there is significant value yet to be unlocked from the Cohance platform. There is a long way to go as we integrate our capabilities and realize the full potential of our platform. With that, let me hand over to Jan.

6:36 Thank you, Humank. I will build on Humank's comments and focus on the operating progress across small molecules, ADCs and nucleic acids. Pharma CDMO led our sequential recovery in Q2 with revenues growth of 34.5% quarter on quarter, primarily driven by a higher contribution from small molecules. ADCs continue to see inventory destocking in commercial programs during the first half, Also, improving orders, visibility gives us greater confidence in the second half trajectory. While pharma CDMO revenues remain lower by 27% year on year in Q2 and 32% in H1.

7:32 We expect the sequential momentum to sustain through the second half. Niche Technologies contributed 13.7% of revenue in Q2 and 14.4% in H1. At Cohance stand alone, commercial revenues remained healthy at around 78% of sales. Also, the quarter had an adverse product mix.

7:57 The forward position has strengthened considerably. We have received multiple reload orders across existing commercial programs, providing better visibility into Q3 and Q4 as well as next year. During Q2, we also secured three significant lateral programs from large global pharmaceutical customers, two commercial programs and one Phase III program. These awards are important because they deepen our participation with strategic customers. Our late stage and commercial RFP activity has also strengthened. Our Phase III program stood at net 11%, and our commercial products moved to 19 On quality, the improvement program continues to progress.

8:52 Turning to ADCs. H1 performance was affected by continued customer destocking across two established commercial programs. While this has affected near term payload demand, the development funnel is moving in the right direction. We are seeing a broader range of RFQs across payload and linkers, including opportunities that can potentially be developed and manufactured from India. We are also progressing a customized payload program for large pharmaceutical customers through scale up, which could generate higher potential in the coming fiscal year. At NG Bio, we have increased and refocused business development resources and sharpened commercial accountability.

9:42 From a capability perspective, our investments are intended to connect payload and linker development and manufacturing in India with bioconjugation, analytical and development capabilities at Angio. This is important because it allows us to participate across a larger part of the ADC value chain. We are beginning to see this translate into execution during Q2. And J. Bio successfully delivered two ADC GMP campaigns, including one program that progressed through the full development life cycle from early R and D and process developments through toxicologic studies and GMP manufacturing.

10:29 We also supported an accelerated twenty eight day drug substance to drug product program for another customer, demonstrating the responsiveness and execution capabilities of the platform. ZAPALA on the Oligo maintained strong momentum, growing 33.6% year on year in Q2 and 83% in H1. Importantly, Q2 growth was achieved without contribution from early Phase III supplies, supported by healthy demand for specialized nucleosides, amnodites and other building blocks for newer nucleic acid technologies. We are also seeing early benefits from integration with opportunities increasingly being sourced through the broader COHANCE commercial organization and manufacturing programs being mapped across our network.

11:30 Our investment, therefore, focused on using the existing network more effectively and adding capability where required to support scale up and larger customer programs rather than creating stand alone capacity. With that, I will hand over to Gunjan.

11:54 Thank you, Jan. I will take you through our API plus business, which brings together our established API franchise and formulation. What is encouraging this quarter is the improving commercial momentum across both businesses alongside the long term opportunity we are creating through new products, regulated market development, and greater participation across the pharmaceutical value chain.

12:21 API plus reported revenue of rupees $26.07 1,000,000 in Q2, representing a growth of 5% year on year and contributing 56% of the consolidated revenue. Performance during the quarter was significantly impacted by a heavy audit schedule across our facilities with disrupted operations and affected the timing of certain customer shipments. Formulations revenue increased supported by product sales as well as profit share income. Taken together, this represents an improved quarterly performance, although our first half revenue remained slightly below the previous year. On profitability, higher raw material prices affected select API products during the quarter.

13:09 We've been working with customers on appropriate price revisions while also driving focused sourcing and process cost improvements. Selective price are through are helping mitigate part of the pressure. Importantly, despite a challenging global environment, our year to date material margin percentage remains ahead of last year. We remain focused on protecting both the competitiveness and the contribution of our niche portfolio. The API business continues to be anchored in a differentiated portfolio across CNS, respiratory, and gastro therapies. Building on the customer qualification and regulatory progress we discussed last quarter, we received further commercial orders during q two across several established products.

14:01 More importantly, the opportunity funnel continues to broaden through the new grades, new customers, and the life cycle management opportunities. Our focus efforts to develop relationships with innovative pharmaceutical companies is also yielding encouraging results. Last quarter, we highlighted progress with three innovative pharma companies on the life cycle management solutions. We have now advanced to sampling stage with two of them. On r and d, we are on track with our targets for the new product development and validation work across selected niche products. The regulatory filing was completed during q one provides a strong foundation for these programs. Our broader objective remains to move further up the pharmaceutical value chain, bringing together intermediates, APIs, credits, and finish to this form wherever we can provide customers with a more integrated and comprehensive solution.

14:57 Turning to formulations. During the quarter, our financial performance was as per plan. We have also secured a new extension of a key product in the emerging markets and are advancing further opportunities in pellets, modified release formulations, and differentiated products. Our ability to offer integrated solutions continues to appeal to our customers. We are seeing a good traction in new opportunities on the formulation business driven by geographical diversification across EU markets. On the regulatory front, recent US FDA inspections across three of our API and formulation facilities have concluded. We submitted all required corrective and preventive actions, responses within the stipulated timeline.

15:45 Our teams are progressing remediation actions in line with our commitments, closely monitoring implementation milestones, and providing appropriate updates to the regulatory review processes are all through. We remain fully committed to strengthening our quality system, ensuring sustainable remediation, and engaging constructively with the regulators. Looking to the second half, we have improved order visibility across both APIs and formulations. We are encouraged by the level of customer engagement, the progress through new product development opportunities, and our ability to participate more broadly across the value chain.

16:23 Overall, we believe these initiatives are strengthening the foundation of API plus and supporting our ambition to build a sustainable, growing business over the medium term. With that, I will hand over to Ahmed. Thank you, Gunjan. Good evening and good morning, everyone. Specialty chemicals revenue declined 40.6% year on year to rupees 417,000,000, primarily reflecting lower agrochemical CDMO volumes, pricing pressure, and program phasing.

16:53 Performance material remain relatively stable. We are nevertheless making measurable progress in the differentiated portfolio. Commercial manufacture and initial dispatches have begun for a crop protection program with two new Japanese innovators. Resetation progress for new AI with an existing innovator is progressing according to plan, and we are expecting commercial launch from s two calendar year 2028. Performance chemical has been more stable, supported by existing coating business and customer programs in advanced materials. We continue to develop opportunities in OLED and electronic related chemistries, including early discussion around semiconductor applications.

17:33 Our strategy is to reduce reliance on a limited number of natural crop production products by growing the share of differentiated innovator led business. Targeted automation and environmental upgrades at our multipurpose agrochemical facility together with a dedicated r and d laboratory are intended to speed up new customer qualification process. FY twenty seven is therefore an important qualification and portfolio transition year. We continue to focus on our medium term strategy of due to... Two new product loan qualification per annum and adding one new customer each geography like US, Europe, and Japan. We had previously expected FY twenty seven revenue in this business to be broadly flat, held by second half deliveries. Given the performance of legacy agrochemical products and the continued generic pressure, we now expect specialty chemical revenue decline year on year in FY twenty seven.

18:26 Our newer programs are progressing, although they will not fully offset this pressure in the near term, while we are confident that over the next two to three years, the trajectory should be improved. With that, I will now hand over to Abhi.

18:45 Thank you, Amrit. Good evening, and good morning to everyone. It's a privilege to speak with you all today on my first earnings call at Cohance. I joined the Cohance family recently. And in these first few weeks, I have had the opportunity to engage with our teams and start building an understanding and appreciation of our business and capabilities across this platform. What stands out is the opportunity to translate these capabilities into consistent financial performance, stronger cash flow generation

19:21 and disciplined return on capital. With that, let me take you through our Q2 and H1 financial performance, followed by the balance sheet, cash flow and capital allocation.

19:35 Revenues increased close to 13% sequentially to about $4,770,000,000 compared with about $4,200,000,000 in Q1. Adjusted EBITDA increased to $458,000,000 from $92,000,000 in Q1 with an adjusted EBITDA margin with our adjusted EBITDA margin improving to around 10%. Adjusted TAT also returned to positive territory during the quarter. On a year over year basis, performance remained lower, principally reflecting the reduced contribution from pharma CDMO, AdChem and an unfavorable business and product mix.

20:23 Let me spend a moment on gross margins because the year on year movement is best understood through the change in mix. Both volumes and an adverse product mix impacted the quarter and the first half. Higher raw material prices affected product margins, while selective pricing and procurement actions are also underway. These headwinds are partly offset by the stronger contribution from our nucleic acid and formulation business lines. Our focus in H2 is therefore not simply on higher revenues, but on improving the quality of revenues, mix and utilization across the platform, which should support our operating leverage.

21:14 Turning to the balance sheet. Cohance remained cash positive at the end of September. Cash and liquid investments were close to $2,900,000,000 against borrowings of around 2,300,000,000 Receivables improved materially during H1. Inventory, however, increased to about $7,300,000,000 from about $5,600,000,000 A significant portion of this is supported by the continuous business requirements and the expected H2 orders scheduled in the second half of the year. Our focus is on maintaining collective discipline and improving the overall cash conversion cycle. Let me now put the capital program into financial context.

22:04 During H1, the group deployed a little over 1,000,000,000 in capital expenditure, excluding acquisitions and ownership investments. We are working on additional capital programs that over the next few years will build adjacent capabilities in ADC payload linkers and bioconjugation. As among indicated, we expect second half of the year to be stronger than the first half. The key drivers are scheduled small molecule deliveries and reloads, continued resilience in our API plus platform, Sapala growth approaching breakeven in NJ Bio and progressive improvement across the broader portfolio.

22:54 Overall, higher revenue conversion, better utilization and an improved business mix is expected to support EBITDA growth in the second half. With that, I hand it back to Cinderella. Thank you, Abhin Maniw. Now I request the operator, Yash, to open the floor for questions and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

23:44 We'll take our first question from the line of Doctor. Kunal Damesha from Macquarie Capital. Please go ahead. Hi. Thank you for the opportunity and seasons greetings to everyone. The first question is on the two additional commercial projects that we have kind of got in this quarter. Uman, if you could highlight the nature of these projects in terms of whether these end products are patent protected, are they from innovator companies? And I assume that, you know, there'll be a tech transfer, so there'll be some lead time before these products can start contributing. So what could that lead time be?

24:30 That'd be helpful. Yes. Certainly. I think both are patent protected, but I will request Jan to give his view on this. Yes. I can respond. Thanks, Uman. Thanks, Hunan. First of all, those are two products that are patent protected and have been launched or are being launched as we speak. Okay? They are from large pharmaceutical innovators, which mean that they will contribute for the foreseeable future to the revenue generation of COHANCE.

25:18 That's point number one. Point number two, revenues on the first campaign is expected either in q four f y twenty seven or in q one f y twenty eight for the first deliveries to the customer. So... And and are these small molecule or on ADC side? Or what should... What's the technology involved here? Here, this is a small molecule. Small molecule. Okay. Sure. So, I mean, it is quite quick. Right? So to... Whatever we are going to deliver, is it intermediates or final API?

26:09 And would it be the GMP, you know, output that you would be delivering? So so are RSM, which is registered starting material. Okay. We'll be delivering RSM. Okay. And then the... Let's say, in terms of the overall unit economic wise, would it be comparable to some of our small molecule CDMO projects? So... And, of course, as those products are are just being launched, right, there is also uncertainty from our customers on how the forecast will develop moving forward. Right? I think that's well understood in the industry. Sure.

27:02 And and and let's say because it happened only in this quarter, I would assume that it would be incremental to our initial guidance of h two being higher than h one. Right? That is correct. That's correct. Being higher than the h two last year. Sorry. Yeah. That's correct. Sure. Sure. Sure. One for... One question I have is for Gunjan on just a second here. Maybe the life life cycle management project that we talked about. Gunjan, if you could explain how this life cycle management projects work in terms of, you know, the sampling to, let's say, you know, commercial quantities, how much time does it take, how does the ASPs kind of, you know, evolve during this time period? And then eventually, whenever the product goes off patent, is there, you know, is there a meaningful change in pricing or volumes? How should we think about it?

28:16 Yeah. Thanks for the question. See, in life cycle management, the offering from our side focuses typically, you know, when the product is already off patent or about to go off patent. Yes. So so in terms of price erosion, they... It's it's not very significant. In fact, the pricing in... If the product is already off patent, the pricing which we get from innovators is slightly premium to what is typically in the general generic space. And that's the reason for going after in a dedicated manner towards these kind of opportunities because these provide a better margin profile, at the same time, a higher degree of predictability.

29:04 Mhmm. The way it progresses is that, typically, you know, you have to start engaging with the with the innovator or a or a big pharma company. There are series of, you know, gate that one has to cross in terms of the qualification process. Audits have to be told everything, you know, on on multiple accounts. And once all those things completed, you move to a sampling stage. Sampling is... After sampling, if everything is good, it goes to a validation stage. If validation is is okay, they initiate the filing in multiple markets. And once the filing approval is secured, it goes commercial. So, typically, the life cycle of something like this could range from a... If you have... We've been able to... One has been able to give a sample and everything goes well, somewhere between, you know, from eighteen months to thirty six odd months would be the time when the monetization would start on these.

30:08 Sure. And these three pharma companies that you would have engaged, are those... Would you say are those existing clients of Cohance, or are those new clients? Of the three, two are new, and one is an existing one. Okay. Okay. Should I ask one question? Yeah. Customers. Yeah. All are European, all three. All are European. Okay. Perfect. Perfect. I have more question. I'll join back the team. Thank you. Thank you. Before we take the next question, we'd like to remind participants to ask a question, please press star and one on the phone. Next question is from the line of Sajid Kapoor from. Please go ahead. Yeah. Hi. Thank you for the opportunity.

30:57 And couple of questions on Surya Pay. Roughly, what share of your H2 revenue or order book is scheduled to ship from that unit? And does the guidance for Y o Y growth in H2 assume it reopens by a particular date? And I mean, if it stays shut through Q3, does that guidance still hold? Thank you. Yes. Thanks for that question. I think we are very early stages of assessing our... Assessing the developments that are taking place at the site. So we are very actively understanding how soon the engagement with the authorities can, you know, bring us back into an operating mode.

31:53 I think you'll have to allow us some time to be able to get to a position of some clarity. And then I think we can further guide in terms of the time it might take and what that time might mean for second half of the year. This, as you would appreciate, is development in the last twenty four hours. So attention is more on the engagement with the authorities on all the regulatory front as of now. Yes, yes. Sure, sure. Definitely appreciate that. And of the INR260 crore of destocked revenue identified last year, how much do you now expect to recover in FY twenty seven second half? And how much in FY 2028?

32:41 And has the second molecules restocking order been received yet? Jan, can you comment on this? Yes. Thank you. Can you repeat exactly the question? I understood Yes, your question, sure. So of the INR $2.60 crores of destocked revenue that identified last year. The question is, how much do you now expect to recover in FY 'twenty seven second half? And how much will slip over into FY 'twenty eight?

33:29 And in continuation to that, has the second molecules restocking order been received as we speak? Okay. Well, thanks for the pointed question. So I think I explained before, right, our situation with our binaural distribution, right, on the small molecule, which means that two of our small molecule KSM are essentially becoming generics in the next one to two years. Right? And as such, the volume here for those two molecules, right, has gone down this year, and that will continue as well for the foreseeable future.

34:24 Right? Nevertheless, one of the molecule that was not part of that second load, right, that was... That had been approved maybe a few years ago and that's still on the patent protection has received very good reloads for end of FY 'twenty seven and also for FY 'twenty eight, and we are in discussion for more coming forward, right? I cannot exactly provide the revenue to be expected here for obvious reason. But nevertheless, this is contributing to the improvement in H 2 FY 'twenty seven and to the improvement expected in FY 'twenty eight.

35:16 Sure. Sure. And finally, record bookkeeping subsidy related cost. And so regarding NJ Bio, the expenses, I think, the subsidiary side fell from 41 crores in q one to almost nil in q two. So the question is how much of this is recurring savings from NJ Bio restructuring? And how much is one off write backs? Thank you. Yes. So yes, thanks, and happy to clarify that. And you can let us know if we got the drift of your question. I think we have fairly limited cost in this quarter on account of the efforts towards completing those restructuring transactions.

36:14 So we do not anticipate any further cost in the second half of the year on account of these transactions, which were done in the last thirty to sixty days. Okay. No. That's helpful, and all the very best team. Thank you so much for answering all my questions. Thank you. Thank you. Next question is from the line of. Officer. Am I audible? Yes. I would just like to know if it goes to plant two plants were under USFGA inspections, is there any still there will be effect on second half of the working because of the inspection going on?

37:08 Inspections are over. There is no we have responded to all three audits already to the FDA. And from here, it will take its course of FDA determining our classification. So as of this time, we do not know what the FDA has the FDA's classification, but we are hoping to hear over the next one month to forty five days or maybe one to three months on what the how the FDA classifies the facility.

37:39 But will it going to affect the second half of the or the third half of the second half?

37:45 Well, it depends on how the FDA classifies But at this point, we're not seeing any impact, but it depends on when the how the FDA classifies it. So I don't want to get ahead of trying to figure out what the classification will be, but we have responded comprehensively to the FDA. But we are receiving this U. FDA inspection and Form four eighty three consecutively. So is it will be how the things will get normalized in future means when we'll come to all this out of inspection things and all that? But this is it will depend on when the FDA deems it is complete, right? If they have to audit our facilities, they will audit. Some facilities are due for audit, so they will come for the audit.

38:41 So I cannot predict what time line the FDA will take for the resolution of their issues. Our job is to respond comprehensively and respond with the right kappa, which is what we have done. Next question is from the line of Shyam Srinivasan from Goldman Sachs. I'm on the road, so just bear with the noise. So first question is on these three contracts that we have won with Big Pharma. Maybe you've elaborated it a bit, but I just want to know what are some of the key ingredients of why we were able to secure these orders? And do you foresee looking at your capacity and network and capabilities?

39:38 Can we repeat this success with other customers? If you want, I I I can take the question. You might Yep. So, Yan, let me... I'll I'll give a view and then you can give one as well. I think from our perspective, our objective is to constantly feed our pipeline, right? I think the three products that we've got are two of them are relationships with deep customers, which we hope to which we hope will continue, right? And obviously, some of these have also

40:21 been opportunities that we have been working with these customers for a while. It's not arrived suddenly out of things. So I think we have a pipeline that focuses on that. And that is where we are trying to aim to add more to our pipeline to work with some bigger accounts and our existing customers. Jan, do you want to give a perspective further? Yes. I can ask, Uman, on what you just indicated, right?

41:01 At Cohance, right, we have a good relation with several large pharmaceutical customers that was confirmed during the CPHI meeting, right, that happened about a month ago. And those large pharmaceutical customers have trusted Cohance on on their commercial products, right, in order to be the the the supplier here. So this is in a very important win, I would say, for for the organization as it's a demonstration that all our efforts in quality improvement in in business development are starting to to deliver significant results.

41:56 Right? So that's... I I want to thank you also the the the entire team at Cohance who has contributed to it. Since we add... Added capacity about two years ago, right, so we have normally the capacity within our network to support these additional business as well. Very helpful. Just on the API plus business, in some of your commentary, you've talked about pricing actions. So I just want to know, among the team, is the pricing environment for generic API? Are you seeing a turn for the good, especially given competition from Chinese, maybe abating or may not be? So just some color around the overall API plus as well and if there is any outlook that you could share for this? Thank you. All the best.

42:55 Thanks, I think just broadly on the generic API side, I don't think we're seeing an environment where prices are massively rising. I think that they're at a situation like the normal generic industry.

43:12 But I think Gunjan's strategy was a little bit more about going a few extra steps beyond generic API as well as moving from one stage to the other, which creates some amount of pricing power for ourselves. And I think that's the path that Cohance is on. But on the generic API side, we don't see too much of price increases happening. At the same time, we also don't see too much of price decreases happening. I think the environment in the market is relatively stable. Thank you. Thank you, and all the best. You. Thank you. Next

44:00 question is from the line of Suresh Bhuram Sethi from Bhuram Financial. Please go ahead. Hello? Good evening, sir. Thank you for. Yes, sir. Actually, present quarter sales to... Sorry? Sir, tellable or a good sir? Sir, please ask the person in tellable. Hello?

44:36 Yeah. No. I... We would prefer if you could ask it in English, please. Sir, am asking the Cohance and further quarters to improve the sales and to net profit or EBITDA OPM

44:58 in further quarters guidance, I am asking. Yes, understand. So I think as we have all suggest sort of indicated in our remarks that there is going to be an acceleration in the operating platform in the second half of the year. And therefore, yes, you should expect that the half over half performance will be improving. Will be improving? Hello? Yeah. That's that's what I said. We're expecting it to improve.

45:46 And Uh-huh. EBITDA... How much EBITDA maintain? How much EBITDA we can maintain, sir? See, we are not giving that level of guidance. All we are saying is that sequentially, our business will improve. So if you have sequential EBITDA already, like this quarter, we have shown 9% or so, you can assume that it will improve from this. Specific guidance, we are not providing. Thank you. Next question is from the line of, an individual investor. Please go ahead. Yeah. Hi. Hi. Hi, team. I'm audible?

46:32 Yes. Okay. Yeah. Thanks for giving me an opportunity. I have two questions. One is related to the facility. So how much revenue was generated from this Suriapad facility in FY 'twenty six, so which is put on hold due to orders from the PCB? That's first question. Thank you. We are not providing that level of guidance because we are assessing the impact and the situation at this stage.

47:18 From a commercial manufacturing perspective, this is actually one of our smaller plants. It is not our largest plant. And so we are not providing that level of clarity. This is also a plant which is a non GMP facility. It's not one of our regular GMP plants. And the other thing that I would just like to also add is that, look, the closure notice will also eventually our attempt would be to resolve the closure notice, right? So it might take a little bit of time. It doesn't mean that the facility will be perpetually, you know, will be perpetually shut because it also creates employment in the area that it operates.

48:07 Right? So I think that's what we would say. We are not providing that level of guidance. Okay. Thank you. But it is one of us... Yeah. So the next... Yeah. Sorry?

48:24 Okay. Said it's one of the smaller facilities. Please. Yes. Go ahead. Sorry. No. You please go ahead. We have answered the question. Please go to your next Could you please?

48:39 So the next question is related to the US FDA observation. So we haven't quietly getting these observations from the inspections that US FDA conducts. So the question is related basically, so how are we learning from these US FDA observations reported for one facility and making sure that we does not get those kind of observations from other facilities?

49:15 I think we have global Kappa that we implement, which means the corrective and preventive action is across all facilities. And whatever we do with actions in one facility, we try and take them in other facilities. But at the same time, all facilities at a different stage of evolution

49:37 from a capability and from a remediation perspective. Right? But our endeavor is that whatever we have as observations in one facility, we will remediate across all facility. Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to management for closing comments. Over to you. Thank you everyone for joining us, and wishing you all a very happy Diwali. See you on the next call. Thank you. On behalf of Cohance Lifesciences, that concludes this conference. Thank you for joining us. You may now disconnect your lines.